The Arizona Republic asked five who are familiar with the new Arizona immigration law for their opinions on whether the law would allow police to simply stop people at will and ask their status, with two saying yes and three saying no (link):

Three panelists said the initial reason for the contact must stem from some other suspected violation, such as speeding, drinking alcohol in a city park or, for juveniles, violating curfew... Lynn Marcus, director of the Immigration Clinic at the University of Arizona James E. Rogers College of Law, said nothing prevents an officer from engaging someone in a conversation about immigration status at any time. But she also said the person is not required to answer the question, based on the Fifth Amendment.

If an officer simply walked up to people and asked them for their status, wouldn't he be sued by the American Civil Liberties Union or similar groups for violating the law, which requires an initial "stop, detention, or arrest" followed by a "reasonable suspicion"? I think that's a safe bet, and it's also a safe bet that they'd win. In other words, this would only happen as Marcus fears (or tries to make others fear) in cases that run contrary to the law.

The five panelists are then asked about this scenario:

Scenario: At 9 on a weekday evening, a police officer comes across three men ages 18 or 19 playing basketball in a south Phoenix neighborhood park. The neighborhood has a large illegal-immigrant population. All three appear to be Latino. There have been no recent crimes or complaints that might be connected to these three men. The men are wearing torn T-shirts, shorts and basketball shoes. They have no identification with them.

To which Arizona state Rep. Kyrsten Sinema says:

The new law does not prohibit the officer from questioning the men about their status. Reasonable suspicion depends on the totality of circumstances and can include a person's conduct or appearance, characteristics of the area and time of day.

The new law does not give guidelines that define what police can use in deciding who to question about immigration status.

As others point out, the scenario described shouldn't raise any suspicions: they aren't doing anything out of the ordinary. Perhaps Sinema would care to tell us what exactly in that scenario could give rise to a "lawful stop, detention, or arrest" as the law requires as a first step. If, as discussed above, an officer just walked up to them and started questioning them about their status, wouldn't the ACLU sue? Wouldn't police departments be especially careful about avoiding such suits?